One of the responsibilities of being a parent is to help kids learn about the management of money. Parents often pay children weekly or monthly allowances or pay children for work in order to give the children experience with money. However, simply giving children money to spend has limitations in the ability to teach them about how money is used and managed. First, it is hard for kids to track how much money they were paid and what they spent it on so they often forget and don't really appreciate or learn about money management. Second, parents often forget to pay the allowances creating confusion as to if and when they were actually paid since there is no record of the transaction. Third, keeping all your money in cash is not representative of how adults typically hold their assets. Additionally, the kids don't learn about real world incentives such as interest on their saved money.
There have been two common ways that parents have solved the problem of simply using cash: log book, commercial bank account. In the log book method, the parents often hold the funds but keep a log book similar to a bank passbook keeping track of credit for payments such as allowance owed to the child or deductions for items the child spent the money on. This method solves the problem of tracking where the money came and went and making sure allowance is actually paid every week or month. However, the disadvantage of this method is that it is difficult to provide the child interest on the money saved without difficult manual calculations.
In order to provide the child with interest, some parents opt for a commercial bank account to manage the child's money. This will provide an actual interest rate. But that rate is set by the bank and not the parent. Often, kids do not have much money saved and bank interest rates on savings account can be very low such as 3% or less. This means if a child has say less than one hundred dollars saved the child would only earn about 25 cents a month in interest. This might not really be enough to generate the incentive a parent would like to see for a child to save. Clearly, it would be better if the parent could set and control the interest rate.
Beyond interest parents might also like to teach their children about investing in bonds and stocks in a safe and controlled environment.
It would thus be advantageous to provide a method for a parent to administer a child's finances. It would be advantageous if this method allowed access to the financial information over an electronic network, such as the internet, and the administrator can set unique account login credentials for themselves and the user. It would further be advantageous if that method allowed the administrator to set the accounts financial parameters such as interest rate, allowance amount, dates when allowance should be recorded, and other financial parameters potentially including investment instruments such as stocks, bonds, and mutual funds that the child may buy and sell. It would further be advantageous if that method tracked transactions, automatically recorded recurring payments such as allowance, automatically computed interest, calculated current account balance, value of other holdings and kept a history of transactions.